A University of Houston-Victoria professor, Dr. Farhang Niroomand teaches international business and economics. Active in the various national and international economic associations, Dr. Farhang Niroomand has a strong interest in international trends in trade and economics.
An IDFC Institute senior fellow on the panel of the WIRED Virtual Briefing “Innovating Through Uncertainty” identified the current pandemic as an event that has disrupted global supply chains in ways that few companies had foreseen. One major deficiency was that backup suppliers were not seeded across various countries and regions in ways that mitigate risk.
With the “enormous fragility” of just-in-time processes now apparent, companies are learning that risk cannot be concentrated in one environment. One example is pharmaceuticals, in which overexposure to Chinese manufacturers threatened supplies of basic medicines even in countries with robust drug production facilities.
The result of this disruption may be a restructuring of supply chains to incorporate manufacturing in a range of countries with low labor costs. In addition, countries in Eastern Europe and Central America may receive a manufacturing boost that reflects their geographic proximity to target markets.
While a well-distributed supply chain can reduce risk, it adds tracking and logistics complexities. In this scenario, cloud-based tracking systems will experience innovation-pushing demand, so that diverse supply chain elements can be actively coordinated.
